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Government Spending Review – the key points for your finances

George Osborne unveils his Spending Review

George Osborne unveils his Spending Review Image via Wikipedia

Today the Chancellor George Osborne unveiled his Spending Review.

Here’s a list of key points from the Spending Review that could have an impact on your finances:

  • New social housing tenants will be offered discounted  rents at 80% or so of the typical market rent. This will not apply to existing social housing tenants. The chancellor has predicted that this will enable the provision of up to 150,000 new affordable homes.
  • Mr Osborne says he understands the public’s anger at banks which and says they have been “poorly regulated”. He added that new legislation which will introduce a tax levy for banks will be published on Thursday. He also said that while the government does not want to “let banks off”, it must also avoid driving them overseas, because of the number of jobs they provide.
  • The state pension age will increase from 65 to 66 by 2020, which is four years earlier than had been planned. This will eventually save over £5 billion a year
  • A ‘Green Investment Bank’ will be set up with £1 billion of funding.
  • Funding for the Department for Energy and Climate Change (DECC) will fall by an average of 5% a year.
  • The Renewable Heat Incentive will go ahead, with £860 million funding and the aim of driving a huge increase in renewable heat over the coming decade.
  • DECC will fund a smaller, more targeted Warm Front programme for the next two years with a budget of £110 million in 11/12 and £100 million in 12/13.
  • From 2013, support for heating and insulation for the most vulnerable will be delivered through the Green Deal.
  • From April 2011, energy suppliers will provide greater help with the cost of energy bills for vulnerable fuel poor households, through Social Price Support – with total support of £250 million in 11/12 rising to £310 million in 14/15.
  • Feed-in tariffs will continue at their present level until 2013, but will be ‘refocused’ on the most cost-effective technologies after that.
  • The TV license fee will be frozen at its current price of £145.50 for six years
  • The temporary increase in the Cold Weather Payment will be made permanent.
  • Child Tax Credit will increase by £30 in 2011/12 and £50 in 2012/13.
  • Sure Start services will be protected in cash terms and disadvantaged two-year-olds will get 15 free hours of early education and care.
  • Higher-rate tax payers will no longer recieve Child Benefits, saving £2.5 billion a year.
  • Benefits for people of working age and tax credits are to be replaced by a new single ‘Universal Credit’.
  • The new cap for increases in rail fares will be 3% above inflation from 2012 onwards, meaning prices will rise.

You can read the full speech here or you can read our more in-depth article about the Spending Review here

What do you think of the cuts? Are you planning a Spending Review of your own, and if so, which areas will you be cutting back on? We’d love to hear your thoughts.

[youtube=http://www.youtube.com/watch?v=xgZ6wBopxwQ&fs=1&hl=en_GB&rel=0]

  • KJ

    Drat! … anyone born after 1955 will have to work a year longer when we just missed it before; will George work or need to work for that long?
    Could have cut more in other areas first (Or taxed the rich millionaire MPs); not all of us are as healthy as the media seems to think that we’ll live longer – doubt it as Diabetes is on increase etc!

    • hm

      Drat doesn’t even cover it!!as someone born on 17 april 1955 I have now been caught twice in the raise in the pension age and it’s so unfair-if I had been born 17 days earlier I would get my pension 2 years earlier. We 1955ers have been doubly hit!!

  • RONALD ELLAMS

    We are all in it together so says Messrs Cameron and Osborne I don’t think so. Being millionaires like most of the tory MP’s and a few labour ones too they have not a clue of the daily grind and struggle to make ends meet most working people, low paid and pensioners have to endure Cabinet ministers and MP’s wont feel a thing with their fat salaries and expenses as well as their untold wealth the rest of us can only dream of

  • SKEMALE

    I have worked extremely hard long hours all my life like so many other people and have a basic lifestyle at present. I am glad the welfare system is being overhauled. Why do so many young people think they have a right to have children without having the means to support and house themselves.

  • It’s clear that we (UK plc) have a large financial problem. Suddenly and amazingly no one is pointing the finger as to how we got here (in this fine mess). We have become so practicle in our endevoiurs to overcome this crisis. The long awaited spending review.
    Vince Cable was told at a recent meeting by a banking chief to, ‘stop demonizing bankers’.
    I agree Mr Cable should stop demonizing them.
    I’d like to see Vince with a large coil of rope in his hand with a view to lynching them all high from the nearest lampost……………some hope………..how do they get away with this???

  • peptroy

    they’re not very clear on their new policies on ESA. How about a rise for disabled people, they are as vunerable as the elderly. it seems if you,re pensionable age you get a lot of help and benefits. what if you,re disabled and under pension age you get nothing extra except your disibility allowance to live on which is nothing.
    child tax credits should be cut so if you cant afford to have kids you dont have them. why should other people pay for them.
    the winter heating allowance should be means tested, there are so many old people with plenty of money who dont need the help. it should be given to disabled people too.

  • Corgisnapper

    Drastic tightening of belts at home mandatory but what of the giant cash guzzling EU? When will any of our politicians have the guts to say no to those parasites?

    Current plans include increasing EU expenditure. This means higher rates of taxation for all EU citizens. Time to tighten their belts too; preferably to strangulation point.

  • cuthy

    i’d like to see all overseas aid stopped until UK plc is sorted at least. Its easy for our governments to be benevolent to other countries when its not their money they are using. Charity should begin at home but they will keep doling out tax payers money to foriegners while our own people struggle. At the same time their own millions remain untouched.

  • Maria

    All I can say is that me and my daughter have lived well below the poverty line for the last 8 years – when we went through a ‘recession’ we barely felt it but now we are expected to live on even less as councils panic – NO we are not on major benefits, despite being below the ‘line’, we get help with council tax and child tax credit only – we are being ‘reviewed’ even so.

    I have never understood why we keep helping others when our own country has been going through a mess for many years than I can recall – I could see it back then and wondered why others couldn’t, and especially the Government – isn’t that their job?.

    We have already given up so much, including our heritage.

    What makes my blood boil is when our taxes are used for ‘Art’ when that money, I would gladly give, for people worse off than me – the homeless for one – in our own country. The council for instance, decided that a town nearby obviously needed an ugly looking monstrosity, supposedly some kind of sundial thing that I believe cost £10,000 – maybe the government should have started with them and their wastes. Its about time we had a say on what our taxes are used for.

  • Chris Plymouth

    It’s not this Goverment’s Fault
    Cut Backs are needed
    As usual, Labour gets in …..Spend, spend, spend
    Conservatives get in and have to …..Save, save, save
    Which is totally necessary to try and get us out of the hole we are in.

    However cuts to Child Benefit should have gone further.
    Child Benefit should only be given to the first 2 children of yours,
    and only to parents over the age of 17.
    This may help cut down on Family Sizes, as well as Underage Pregnancies.

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